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Remitting money overseas is necessary, but it doesn’t have to be risky
By Ivy Lun
If you’re a frequent user of digital remittance platforms, you may have noticed that the range of remittance methods available for use has grown considerably over the last few years. With COVID-19 restricting travel and increasing the need for hygienic, contactless transactions, the number of remittance channels and operators providing money transfer services has only escalated further. Besides traditional cash transactions – which are still quite popular – there are many more options for you to choose from when it comes to electronic funds transfer platforms.
But the question remains – how do you pick a service provider you can trust, and a payments partner that will help you transfer funds safely and efficiently? Here are some things to bear in mind while you choose your preferred remittance provider:
1. Reputation and Legitimacy
First and foremost, check the authenticity of the service provider. You may find an unverified service provider who is willing to transfer your money for a lower cost, but before you go for it, stop to strongly consider whether this is a risk worth taking.
The money transfer platform must be authorized to operate by relevant regulatory bodies and hold all the necessary licenses to carry out your transactions. This is especially important in the case of international transfers.
There is no common standard when it comes to global payments – payment systems in each country are structured to meet local laws and practices. A cross-border payments operator should be well equipped to comply with local regulations.
So, choose a provider with a proven track record and a reputation to uphold. What information does the service provider’s website give you? What do the customer reviews and press releases say? Go ahead and find out before you take the call.
2. Security and Compliance
Nothing is more important than the security of your funds and data. You should be able to relax knowing fully well that your money is in safe hands. Look for a remittance provider that takes all the necessary precautions to transfer your money securely.
Digital payments platforms must comply with the highest possible security standards. For example, in case of card payments, the credit card processing must be PCI-DSS compliant. Similarly, it’s important that the platform you choose to operate with mandates a KYC process. A comprehensive onboarding and verification process is an indicator of a safe and responsible remittance platform.
3. Cost Effectiveness
A payments platform must be transparent about the costs associated with transactions. When it comes to overseas payments, fluctuating FX rates, conversion costs, and the involvement of intermediary players can significantly hike up remittance charges.
The last thing you want is for the payments platform to deduct a huge chunk of change from your fund transfers. Imagine transferring US$100 to a supplier overseas, only to find out that they ultimately only received $50. You may not have clarity on what the payments platform did with the rest of your money, and you may also have to answer awkward questions from your client, who is still owed a further $50.
A reliable service provider will offer you the best exchange rates and also give you a true picture of the fees you are about to incur. When you are choosing your remittance operator, enquire upfront about the possibility of hidden costs and expenses – how forthcoming they are about this information will help you make your decision.
At the pace of business today, efficiency makes a great deal of difference to operations. This means it’s often too much of a chore for a startup to send someone to wait at the bank on a busy day to transfer money.
Similarly, a delay in the transfer is another issue you’ll want to avoid, especially when your transaction is time-sensitive. If you urgently need to make a payment for a service – for example, a data recovery service in the event of a cyberattack – you cannot afford to wait for the money to take several business days to arrive. Efficiency and speed of transfer, therefore, should be another priority item on your checklist.
5. Range of offerings
Digital payment systems are rapidly evolving. Payments platforms update regularly in ways that add unique features to better serve customers (and outdo competing platforms). Sophisticated money networks today enable instant transfers, real-time tracking of funds, automated transfers, and card-based payment solutions, among a host of other features. Based on your needs, find out what suits you, what you will benefit the most from, and zero in on a service provider of your choice.
6. Service and Support
Given that your transfer is likely to occur across not just currencies but also time zones, look for a platform that can extend 24×7 customer support to you. Even though the service itself may be digitized or automated, as a customer, you must have the option to speak to a staff member, if you want to. The support staff, in turn, must have a thorough understanding of their own offerings, be knowledgeable about cross-border payment regulations, and assist you with anything you may need in conducting your transaction seamlessly.
So, check how responsive the customer service team is via email and phone before you sign up with the platform. If they are unavailable over the weekend or after regular work hours, that could be a potential weak point.
While fast, easy and efficient remittance methods are a necessity, the safety, security, and integrity of the channels enabling these transactions are also equally critical. So, make sure you do your research well and use your discretion to select a remittance provider that not only eases your transactions but also values and protects your trust.
Header image by Steve Johnson on Unsplash
About the Author
Ivy Lun Head of North Asia Instarem
Ivy Lun is Head of North Asia at Instarem, a leading digital cross border payments platform that enables consumers and SMEs to send and collect international money transfers conveniently and securely. Based in Hong Kong, she is responsible for leading the business in the North Asia market. This includes developing new business partnerships throughout the region and growing the company’s partner network.
With over 20 years of experience in the payments industry, Lun is an industry veteran who has held various leadership positions across large organisations such as MoneyGram International, American Express and Citibank. Ivy completed her Master of Business Administration (MBA) at the University of Ottawa, Canada.